Colonel Muammar Gaddafi must not be allowed to succeed in crushing the popular uprising against his rule, David Cameron has said, as he continued to make the case for a no-fly zone over Libya.

The Prime Minister said the formal call from the Arab League at the weekend for a military no-fly zone to protect the population from attack by the regime's warplanes marked a "very significant step forward".

In a Commons statement, he did not rule out the possibility of arming the Libyan rebels - although he acknowledged that there were difficulties, including the continuing United Nations arms embargo on Libya.

Foreign Secretary William Hague - who is meeting G8 foreign ministers in Paris - said the international community was approaching the "point of decision" on military intervention.

But while France also continued to stress the need for action, Germany was more cautious - reflecting the continuing divisions within the international community on how to handle the issue.

Mr Cameron told MPs that time was running out for the Libyan rebels as Gaddafi's security forces continued to strike back against them.

"Every day Gaddafi is brutalising his own people. Time is of the essence," he said.

"We have seen the uprising of a people against a brutal dictator, and it will send a dreadful signal if their legitimate aspirations are crushed, not least to others striving for democracy across the region."

He also indicated that he would look at a call by the former foreign secretary Sir Malcolm Rifkind to start supplying arms and other military equipment to the rebels who are currently out-gunned by the regime forces.

"We should not exclude various possibilities and there is an argument to be made here," he said.